Well, I actually did it.  I recorded my first album and put it on CD-Baby back in January of 08.  I thought someone here may be thinking of doing the same thing so I thought I'd share my experience with this thus far.
First about the album.  It contains 12 instrumental tunes that are completely original to me.  I recorded almost every one while deployed to IRAQ using only a Roland/BOSS BR-600 digital recorder and my Floyd Rose DST-2 guitar and a set of headphones.  The drums on each tune are all programmed using the BR-600 and the bass lines are emmulated via effect also using the BR-600.  I included info in my Bio to indicate that the album is amateur recordings so that people who preview it know what to expect with the recording quality (which turned out pretty good but not studio quality). 
I actually recorded many more songs than just the 12 included on this album but I chose to only include those that I thought were either the best quality or simply good jams. 
So, on to the CD-Baby experience.... 
I was aware of CD-Baby for some time.  I've been interested in selling an indie album for a long time but I just figured it was out of reach.  I must say that it is definately in reach.  Total cost to digitally distribute my album on cd-baby as well as all of the download sites like Itunes, Napster, Rhapsody, Etc... was $55 ($35 setup and $20 for a bar code).  That's it and that's all you ever have to pay for that particular album.  Note: you have to get a bar code for each seperate album you choose to sell.  You cant keep using the same one.  Just FYI.
So, what I did was pick the songs I wanted and created an audio cd of the those songs in the order I wanted them to appear on the track list.  I used just a standard music CD-R.  I didn't bother creating a label for it or anything.  Just wrote the name of the album on it using a marker.  Included with the CD was a letter to CD baby telling them that I was submitting this CD for Digital Distrobution only.  I then just simply addressed it to CD-Baby and stuck it in a mailbox.
Next, I went onto the CD-Baby website and created an account and loaded all of the information for the CD.  This was a bit of work.  Alot of info is gathered but it's all fairly easy to fill in.  You'll want to give some thought to some things like your Bio and stuff.  Also, I lsted the physical CD as out of stock as I do not intend to ever sell the actual CD... only digital downloads.
I opted to have my album sent to all digital distrobution sites.  CD-Baby does this for you for free.  All you have to do is allow them to do it.  I also opted in for additional digital disto so that the album would be sent to such places that offer free streaming and so on.  This is the only thing I am slightly disappointed with.  After more than 3 month's my album has only been sent to 14 digital distro web sites.  But, I'm told that it just takes time and that the number of sites will increase.  We will see.... the cool thing is that all the big ones were used right off the bat (like Itunes, Napster, etc...)
CD-Baby takes care of creating the MP3's from your tunes and creating a web page on their site for customers to preview and purchase your album. (no extra charge)
You can set the cost of your mp3 downloads from CD-baby to anything you want at any time.  So if you want to have a week of "on sale" type thing, then you just log on and change it.  Let it ride a week or so then change it back to your original selling price.  Too easy!  The download price from all of the other sites like Itunes and such will remain constant though.  You make a different amount per mp3 sale depending on which site your music is purchased from.  Itunes is most popular.  I make about $7 if someone buys all 12 songs from Itunes.  Just to give an idea.  (The ability to alter the download price at will is awesome)
That's all there is to getting your Album out there and for sale.  The quality of your recordings and your advertising efforts are all that is needed from that point to get your album to actually sell.  I have done absolutely nothing to promote my album and it still has sales.  I'm reluctant to promote my album because I don't want to be a spammer.  So I rarely talk about it in the forums.  I'm thinking about building a seperate web page to promote it though.
I'd be happy to provide additional info on my experience with this.  I'm sure there are others on Guitar.com who are considering selling an indie album.